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good morning. a last-minute deal to save cyprus from financial collapse, the country is securing a $13 billion either dollar or euro -- billion dollar bailout. global stocks rallying on the news. it's march 25th, 2013. "squawk box" begins right now.
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good monday morning, everybody. i'm becky quick along with andrew ross sorkin and joe kernen. cyprus clench ago deal just hours before a deadline. that deal will shut down cyprus's second largest bank and inflict heavy losses on uninsured depositors. those who have 100,000 pounds or less in these banks should be protected and that is why you see green arrows across the board on some of these markets. in france, in fact, the cac is up by 1.7%. in germany, the dax is up by almost 1.4 had%. green arrows across the board and the euro picking up steam, as well. at this point, trading at 1.3016. the major asian markets overnight, keying off of this. in japan, the nikkei was up by almost 1.7%. here in the united states, we have the u.s. equity futures indicated higher, as well. those dow futures up by almost
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80 points above fair value. things are off to the races as far as the markets are concerned. this is a huge bullet that they've dodged. our chief international correspondent michelle caruso cabrera is reporting in cyprus on all the developments. kelly is in eu where the imf and cyprus struck the last minute deal. first, andrew has breaking news on dell. >> thank you, becky. sources are telling us that dell's special committee has officially determined that proposals that came over the weekend from blackstone and carl icahn, quote, could be reasonably expected to result in superior proposals. now, what this means is that dell is going to be negotiating with blackstone and carl icahn over the next several weeks. there is no timeline. both groups will be able to go forward with these negotiations. and here is the most interesting part. because the letters were submitted in time by the deadline, which came on friday at midnight, both groups will only have to pay a $180 million
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break-up fee. had they, for example, put in a proposal today, they would have had to pay a much higher break-up fee. let's go through the detail. the special committee finished a conference call last night at about 9:30 where they voted to move forward with both of these bids. some people are calling them bids. other people are calling it a leverage recapitalization. it calls for a stock price of a 1425. the dell deal that's on the table is for $13.65. this is $14.25 a share in cash or you can accept not just cash, or you can take shares in the company. so firms like southeastern and others who have said, look, i want to participate in the future of this company, they can. blackstone -- here is the important point -- they don't have financing yet. so this is a proprosal and that's what they said, it's a proposal to lead to another proposal. all it has a is a highly confident letter. >> can you do that? >> you can saw, we are highly
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confident that we can get financing. can they get financing is the question. there are a lot of banks lined up behind the silver lake michael dell proposal. there's not a lot of banks left. there's morgan stanley, which does have mitsubishi behind it. deutsche bank is hanging out there in the world. ubs could get involved. >> is there a deadline when they have to come up with financing all this stuff? >> there is not. this could go on for a very long time. >> blackstone is doing this with two other firms. those include inside venture partners and also francisco partners and we should say that david johnson, you remember, was the head of dell's m&a team who moved over to blackstone, he's the guy trying to get this done. >> that's interesting. so they have somebody on the inside who knows how this operates, too. >> that's a lot more than the old deal. what are you laughing about? >> that's 60 cents more. >> 60 cents more. >> it's depressing to me.
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>> there's 1.7 billion shares outstanding. >> i know. it adds up to money. but shareholders are all in at 23 and stuff. it's depressing. you know what kind of m&a i want? i want gold foil where it goes up-and-up and up-and-up. this is like this crappy old -- who even knows if the company is going to be around in a while. they make pcs. >> i might take $13.65. >> after all this, after the go shop it's 60 cents more. it's not even a dollar more? or you can participate -- >> i know. but at least you can get the stocks. >> carl icahn's deal is a little different. >> is it even real? >> i don't know. >> he could do it himself. >> sources say he owns about 4.5% of dell himself. it's about 80 million shares. his offer is for $15 a share. so more than a buck. but he's only offering to buy 58.1% of the company. as part of that deal, he's going
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to invest $2 billion of his own money. he wants to spend $7.4 billion in cash that dell has. he's going to use another $1.7 billion in receivables and then he's going to add 5.2 billion in debt on top of the company. >> who was arguing the receivables aren't worth anything? >> there are people who argue the receivables aren't worth anything. and the idea with both of these deals, t. rowe price roll into and the question is whether michael dell ultimately loses his job. when he got involved in this originally, he wanted to take control of the company to run it. but now, if they were to accept either deal, do you actually stick with the company? are you the ceo? does blackstone want you to be the ceo? these are serious questions. >> is anything you just said different than the times or the
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journal? >> a little bit of it. >> who calls who? did they just start making calls yesterday, the people involved with this? how did this work? >> no, no, no. the news this morning is that actually the board -- >> this is different than what the journal has? >> yes. they've decided to move forward with this. >> but these are the terms of the deal. >> right. you could clearly say so yourself, these aren't likely to lead to interior proposals. >> because you need to know the details. >> and you need to know that it's a real deal, meaning it's a firm deal. what they're saying is it could lead to a superior proposal, so they're going to negotiate, negotiate with negotiate. >> wow. >> there you go. >> tired already? >> those are interesting. i like the details because you can look at the details and try to figure out where the weakness is. >> would you take -- you think they're all weak? what are you saying? >> no, i'm not. i'm here. i'm here listening. i marginally think at least it's
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a deal. it's a lot of money. i think maybe the angle is michael dell loses this company maybe is what we need to think about, right? >> now for him the saddest part. the question is, did he then bony up with silver lake to beat these? >> that makes it a little bit more. you know what i mean? it's like we want it, but no one is really dying to have it. it's really weird because it's almost as if no one wanted it and dell said, okay, i'll take it. and is people said, if you're ready to take it, there may be some value left in it and a couple come in and go, maybe there's a little bit -- maybe there's 60 cents more. >> let me throw one other stat at you which i learned last night, as well. >> this better be good. >> over the summer, they were rejecting revenue for 2013 through 2014 fiscal year. $5.6 billion in operating income. >> okay. >> by january, based on what the original silver lake deal was, they were projecting $3.7 billion. >> okay.
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by now, what you're going to be hearing from what i understand over the next couple of days is they're going to lower it down further to about $3 billion. >> so, in other words, the weakness keeps bickering. >> unless -- >> people shorten that, don't they? >> some will say they're sandbagging. >> but you were very careful. >> i was. >> stop dickering -- that's not certainly a word. you're trying to make it cable friendly. >> and we'll get both copies of the proposals and the letters around 7:00 which should hit the tapes. >> how long do we have to wait for those? >> about 52 minutes. can you wait? can you afford to wait? >> no. i'm going to try. >> while we're waiting for that, let's get back to cyprus. michelle caruso cabrera spent the weekend there. michelle, why don't we start things out with you. we're watching all weekend long. i saw a lot of the stuff that
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you were treating back. it sounds like people there are under enormous pressure. >> yeah. it was a very intense weekent for the cypriots. when we saw this drama exactly one week ago today, the plan was to do something that many people thought violated a sacred trust, which is to tax depositors below 100,000 euros. exactly one week later, that idea is completely dead. it's not going to happen. however, if you have uninsured deposits, over 100,000 euros in either one of the two banks that are going to be restructured, you are going to suffer severe losses, anywhere between 30% and 70% depending on which bank. equity goes to zero. junior bondholders to zee he row. senior bondholders for the most part to zero depends on the bank. what's the impact for investors? if you are an investor in european banks, you are on notice. every single bailout that has happened, your protection has diminished step by step by step.
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this is by design. it is europe's stated goal that by 2018 bailouts will not be a burden of the taxpayer. they will be born by the private sector and the investors in the questionable institutions. these banks will likely see interest rates rise as a result of this, maybe the countries that they're in. the question is, is this going to cause broader risk or force discipline and responsibility or both? >> additionally, european decision making once again seen as haphazard as they flip-flop the lot. the two banks will either go away or get extremely small. thousands of bank employees took to the streets. they are extremely angry. a lot of them are going to lose their jobs. a lot of them are going to lose their savings. their pension funds were in these banks. they're going to suffer dramatically. we spoke to one woman, she's 44 years old, she has two kids. just a little bit of what she told me.
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>> my money. >> your pension fund? >> my pension fund, my money. they were taking, deducting them from my salary every month and is i'm going to lose everything. with no job, no pension, no money, nothing, nothing, nothing. >> it was pretty devastating to talk to a lot of these folks. we've seen this over and over again in europe as we've seen dramatic drop-offs. we're waiting to see what the status is. in theory they should because the ecb's condition was you had to have a plan in place. and there was a plan in place, it's a question of getting the mechanics done or shifting deposits, etcetera, etcetera. let's get over to kelly evans where the drama was all weekend in brussels. kelly. >> and michelle, it was drama until the wee hours of the night here behind me. 4:00 a.m., 5:00 a.m., that's when ministers were leaving here, having at least agreed to something. remember, on sunday, it didn't look like we were necessarily starting the deliberations.
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let's remind otherwise of what we're talking about here. the cyprus economy is neither too big or too systemic to fail. fall is basically what the euro group has imposed on it. eats leaving it with almost no viable economy, certainly not to support the size of the economy it will grown to support. the trouble for cyprus being that they're going to have to take that pain and now the years ahead are going to be extremely difficult. we don't even know when banks are going to reopen. last night after those long negotiations when the cyprus manager left, julia stopped and asked him when people are going to be able to get their hands on their money. here is what he had to say. >> bearing that in mind, are the banks going to open on tuesday morning? >> i cannot say that. i cannot say that. it's always a mistake to say something like this when you are not completely sure. there is a lot 06 work to be done, but they will open very soon. >> and how long do you intend to use the capital controls for?
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>> that also i cannot answer. but, again, our objective to keep them as limited and is as short as possible. >> even so, guys, the question isn't so much a failure of cypr cyprus, it's the future of the european union and the eurozone in particular. and leaders last night felt like they had, if anything, assured that future. but i can tell you there's a lot of nervousness, a lot of questions about the decision-making process in particular. now, there's this stil thing called the troika that surpassed bailouts has been in charge implementing them, sometimes not implementing them with the best judgment, but nevertheless implementing them. the question becomes about the relationship between the members of this troika and whether this body can continue to govern these bailouts going forward. so it includes the imf led by christine legarde, ollie rehn and the relationship between the banks. the relationships looked extremely tense last night, but on their way out, they tried to assure us that there is actually no problem.
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here is what christine legarde had to say about it. >> would you tell us about the future of the troika with regards to future bailout? >> the troika is doing fine. actually, there are two of us. we're doing okay. thank you very much. >> so, you know, an attempt to look friendly, that was two out of the three representatives. we didn't see mario draghi, although he was present for these deliberations. so at a time when the eurozone has an economy that's extremely weak, where we've just learned that if anything the downturn is accelerating, that the austerity measures haven't succeeded in turning this country around and that there still is no uniform way here of dealing with the failure of these banks or frankly with sovereign bailouts going forward is not going to help investor confidence. so there's a bit of a relief this morning, but also a lot of the people saying, if the eurozone wants to become a healthier more functioning monetary union going forward, this has dramatically set that back, guys. >> kelly, all right. i assume you went through paris
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to get to brussels. that's what i was thinking about. is that true? >> yes, i did, joe. as soon as i crossed the line into belgium, there was snow on the ground. it's freezing here. it's late march, but it's not just inside that conditions have been chilly, to say the least. >> as i've been saying, kelly, it's another example of global warming when it gets really cold is now. in other news, jpmorgan's board says it strongly endorses a dual role for jamie dimon who still made the baron's list. >> a lot of them came off, some went on, but he was still there. he's their most villainus to a lot of people on that side of the aisle, right? >> and he's on na side of the aisle. >> barely, like you at this point. right? you're coming around. you've got to fill us in on --
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>> what do you want to talk about? >> you've got to fill us in. no one saw you so you didn't violate your reality clause or -- >> new orleans? >> talking about new orleans. >> and maybe this is a shift in corporate america. in the old days -- i used to go to this conference ten years ago. there were a lot of things that happen. nothing happens any more. i'm just saying. when i started working at the "wall street journal," there were guys that still kept flasks in their desk and they take them out at deadline time. >> there were things that happened ten years ago, but it doesn't happen any more. >> you didn't have a flask. you had a bong. did you know that looked like a bong. >> no. it's called a hand grenade. >> you did go to a -- oh, a hand grenade. >> and it was a -- but i drank it very quickly the day before. >> it was alcoholic, wasn't it? >> it was alcoholic. i did it for the cheese. >> but you had orange juice.
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>> in the morning i had orange juice because i needed it. >> back to jamie dimon. a new shareholder proposal calling for different people to hold the two posted similar to last year's proposal, which was able to garner 40% of the vote. the annual meeting is going to be held may 21st in florida and we'll talk more about that issue at 6:40 eastern with management expert jeff sonnelneld of yale. in other news on jpmorgan, kate kelly reports that the justice department is in advanced stages of a criminal investigation into the bank's so-called london whale traders. they're looking into whether traders intentionally mismarked positions and hid losses. we've talked about this right when it was happening because it's such a -- you don't even know what the real -- on an ill liquid investment, you're not sure where the marks really are. it's so arbitrary. it's very hard to prove. >> civil, yes.
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criminal? much harder. >> this could lead to a securities fraud claim by the government. >> also, bank of america's ceo brian moynihan will reportedly need to hold shares likely worth $1 million for at least a year after he retires. this is a change under a new compensation policy there. the bank instituted that change after investor pressure. the policy requires some other top executives to keep a minimum number of shares of the bank at least until they retire. previously, moynahan only needed to hold the stock in the company. meantime, other top executives did not have a holding period requirement, but, again, interesting change on how things are set up. why don't we take a look at the markets this morning. as we mentioned, futures are sharply higher on news this of this deal in cyprus. this morning, dow is up over 8 on points. s&p futures are up by more than 10 points and the nasdaq is up by just over 17.5 point. oil prices, they're up about 44 cents. almost 0.5% to $94.15. and the ten-year note, again, people were watching very closely what happened to
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treasuries yesterday. yield at this point at 1.958%, sitting just below 2%. the dollar is a little stronger against the yen, but it's down against the euro because the euro got some strength on this news. euro is at 1.3012. gold prices, which many people wonder if this is a proxy at all any more for chaos, gold is down by 4.50 to $1601 an ounce. >> it now, it's time for the global markets report. ross westgate is standing by in london. ross, you've seen plenty there, as well. >> yeah. and look, when we looked at the gains we got at the moment, we pretty much clawed back most of the losses we saw last week. the ftse 100 down 1.5%. the xetra dax was down 0.8% and now it's up 1.3%. we probably shouldn't get big gains. the ibex up 1.2%. the ftse mib, up about 0.3% at
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the moment. we had an auction result, as well, from italy. banks as you might expect have been the biggest component of -- contributor to the rises this morning. the likes of bnp paribas up 3%. deutsche bank up 2%. unicredit, up about 2.4%. what it has done, of course, is highlighted the crisis management kelly was talking about this and how that seems to be getting worse and that basically austerity is still very much in tune. now, people think about where does this leave italy? bersani was given permission by the italian president late on friday to try and form a government. we'll be watching events this week. it may be a fairly tall order on. we did get an auction out of italy. yields higher, 1.74%. 1.68% for the two-year bond in february. that's about the highest since
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december. 20-year bonds are slightly lower today, 4.45% as are ten-year spanish yields, 4.81%. but that spread is now significant. we've got a five and ten-year auction coming out of italy on wednesday. we'll see how that goes. for now, back to you. >> okay, ross. ross westgate, thank you very much. you're all alone. that's okay, though. hang in there. coming up, today it's very private schoolish. what is -- is that new? >> no. i just haven't worn it in a while. >> what is it -- what's coming to me with that? what is -- is that a school? is it a -- >> is that what you're thinking? >> i don't know. mandy -- >> yeah. i wore my argyle knee stocks. >> and gione von ferstenberg. >> you know what it is? i'm going through my clothes looking for old things. but thank you for noticing. you went to a catholic high school and i did, too. this is a little reminiscent.
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>> i was a boy and -- >> we had gray jumpers there, now black. >> reminded me of an animal house. >> the one who wound up back in the -- yeah, he left her in the grocery cart at the end? >> yeah. >> back at the dean's house. >> and what's his face. i don't know. it's a movie. >> i know the movie. >> you do? >> i do. >> what are you doing, mac? you're covering my -- he he has his hand in front of my face. he wasn't even here friday. thanks for coming in today, mac. nice. nice to have a job. you have another four-day week. >> he's saying go, read. coming up, why boomers are feeling more financially secure today. finally, we're going to talk about fantasy -- did you see cramer talked about lasalle? >> no. >> he predicted that last week and lasalle was up. first, a look at last week's winners and losers. (announcer) at scottrade, our clients trade and invest
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welcome back.
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right now, dow futures are up by over 80 points above fair value. s&p is up by close to 10 points. in our headlines this morning, there's a new survey that finds bankers concerns have abated slightly over the last year. apparently a quarter of them are feeling more financially secure than they did 12 months ago. among the reasons are the stock market gains and continued job growth. andrew, back over to you. >> thanks, becky. let's get the national weather forecast for the weather channel's alex wallace. alex, i hear snow may be coming our way. >> yeah. just a little bit. this is night to write home about, but a little bit of snow coming in for this early part of spring. now, a lot of snow that we dealt with back across the midwest. st. louis, over a foot of snow from this system, 6.2 inches, still snowing in some areas. we're starting to pick up the snow now for parts of the mid-atlantic, including d.c. and baltimore. some steady snows in these areas and we're finally start to go
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report snow in philadelphia and it's filling in a cross southern jersey and making a run for the new york city area. we're not expecting it to pile up in those locations. here is how it shapes up through morning hours. snowfall along that 95 corridor as we move through the late morning. then as we get into the afternoon, we notice a little green tint to things. that's because we're mixing in a bit of rain. and the good news there is that will help to hold down the snow totals for us. temperatures cool down. light snow into the early morning. how much are we going to see? through early morning, it looks like north of the d.c. area, northern suburbs is where we could see anywhere from 3 to 5 inches. d.c. itself, 1 to 3 and that's what we're thinking, as well, as we slide up to new york city. in between, philadelphia of the major cities will be the biggest winner in that the 3 po to 5 inch range through your tuesday
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and wednesday morning. >> great. i'm fine with this. we had nothing last year and -- >> i'd rather have know than the rain. >> you saw what happened in the rockies. i think faber was out there, great spring skiing over the past week. >> he skied this weekend right here. i know it's not the same, but there's enough snow which is crazy for this time of year to be able to do it. >> apparently there's some type of basketball tournament happening. >> not that you noticed. >> i saw probably including friday since i left here, i don't -- >> you sat in front of the tv? >> maybe 40 hours of -- 16 games. >> i caught a glimpse here and there. i didn't even know indiana was a close game. >> oh, my god, indiana. anyway, friday, there were 16 games and i was only 9-7 and i had to win the last four that night. >> you're still way high up, though. >> i am. i'm third. i finally passed shactman. i picked cincinnati and villanova and i lost on some other ones, but then i started hitting. i hit minnesota and some others
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that hit on friday. 34-14 is my current -- i got is 11 out of 16. >> and i'm not even playing. >> you didn't fill out your brackets? >> no, i didn't. i went to new orleans and that was more fun. >> i got 11 out of 16 -- 11 out of the sweet 16. >> that's amazing. >> but i got -- i think i have only -- i think i got all final four still around, i think. i think i still have -- >> i don't have any of those. >> the possibility of all the final four getting in there. not only that, i've got my entire family is obsessed now. >> that's good. >> penelope -- >> when it becomes a family thing, that's a good thing. >> penelope watched the story of the florida gulf coast kids, and the coach and the kids. >> they have a father and -- >> it's the corner school. >> but you've got like waterside dorms there and poolside dorms
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and you can take your pick. >> the school just opened and they have a -- anyway, among the most interesting games, we're going to talk about the florida gulf coast upset san diego state yesterday to get to the sweet 16. san diego state has been there two out of the last three years. kansas couldn't -- it was like 1 for 14 when they started, but they looked better than north carolina the whole time and in the second half, they just took it to them. so, you know, i think they were down 9 and they won by like 20 or something. so they killed north carolina in the second half to advance. lasalle is the one i was talking about, number 13. cramer talked about this after they had just won in the first round and then they won two more games. so they've won three games already, 76-74. they're going to take on my daughter's favorite team, the shockers from wichita state. i don't even know why she liked them. duke topped creighton. the two most exciting games
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yesterday, if you were watching, indiana had to win ugly, basically. and then at the end, there was a key three-pointer. and ohio state was phenomenal. aaron craft went down, 35 seconds left and took it down to four and threw up a three-point buzzer beater that was all net. it was just so amazing. that's where my kids watch. the hair on the back of your neck goes up. >> it's so great, the schools and the kids celebrating the whole thing. >> and they're not playing for money yet. >> yet. >> and i almost started crying watching a pitt player talk about he had the worst game of his career and it had to come now and i let all my team down. the coach couldn't talk because he said my point guard just broke down. it's really good, andrew. it's better than sitting there watching someone take their clothes off in new orleans. >> i didn't do that.
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>> did you know he was back by friday? >> i was back by friday night. >> i guess this is what i imagined. this is what you would have done ten years ago, right? >> ten years ago. instead, we ate like crazy. >> that's why you had to do the cleansing. >> that will become more and more prevalent as you age, where the big pleasure in life is no longer what it might be for you now, where it becomes food. >> eating. >> and not food in conjunction, not the 9 1/2s strawberry whip cream stuff. just lots of food. that becomes it. >> well, i don't know how to top that. >> well, you have your catholic school. you don't have patent leather shoes, though. those were banned. >> because you could see up them. >> you couldn't see anything. it was a shine. when we come back, it's a four-day trading week. there is cyprus. we have cyprus, a few earning eggs reports and economic numbers. we'll have the trends that you
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good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. it is time to talk about the markets. and joining us is fred dixon of ca davidson and daniel sethage. he is cjm institutional services. we had a big day on friday, guys, almost made up what we
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lost earlier and now we're up another 80 or so. we could hit new highs today. fred, are you bullish that we could go further or are you telling people to maybe slow down? >> we remain bullish. we've seen the market go through a series of highs recently. i think this morning's news out of cyprus will bring some men out of the sidelines. it will bring some back into treasuries or the sock market. short-term, we go higher. after a 20% market rally since november, i think it's time to be selective in terms of what we buy. but i think this market has a little bit more steam. we've got economic data coming out this week. we're going to learn about housing starts, get a revision to first quarter gdp and then we're going to start looking to see what first quarter earnings look like. >> how do the -- the technicals or the internals look, daniel? >> you know, right now i think with the cyprus thing on the back burner, you're looking pretty good. you're going to see that new high, if not today, certainly
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soon. and i would look for a pullback just on profit taking because we had such a big run here. and the thing to look at here is on economic data. gdp in the fourth quarter and chicago pmi on tri. we'll see how we go forward and as your previous guest just mentioned, earnings season is only a couple weeks away. fred, would you call this anywhere close to getting frothy yet when you talk to clients or just anecdotally? >> joe, a lot of our clients look at the market. it is frosty because we're at an all-time high. >> if they think it's frothy, it's probably not frothy, right? >> that's exactly our view. with the market trading at around 15 times earnings, we say we're probably closer to the bottom enof a valuation range than a top range. in our mind, on frothy market, we would see sectors of the market elevated on a multiple basis. we would look for individual groups gaining very, very strong
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momentum. bubble peaks around the market. we don't see that and we remind them that normally at a frothy market top, we're going to see valuation ranges closer to a five-year peak. that would be 16, 17 times earnings and with the fed pumping in money like a fire hose full on, i think we're going to continue to see earnings grow, cash flow growth. but again, selectivity and caution is always the watch word, especially after about a 20-% month of in four months. >> if your clients are saying, gee, fred, i don't know, it's gone too far, too fast. when you're near the top, get me in, ride? i can't take sitting out any longer. it's not, geez, i'm worried this is too frothy. funny the way that works. and it coincides with what you're saying is the low end of historical valuations in a bull market. >> joe, our clients are still somewhat cautious. when we get the phone calls
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coming in and saying, we have to buy it, then we know we're at a top. we have clients looking for value and still sitting on a lot of cash. so those are good, longer term signs. >> dan, the vix was up last week, i guess. 20%. but that's like -- >> right. >> i don't know. that's like andrew's -- that's like the sweeter deal for dell. >> they're both lousy offers? >> i don't know. it's up, what, 60 cents? >> the icah this is one was up -- >> that's only 58%. >> still is vix is at 13. >> there's no surprise it's gone up there. but over time, it's at a really low level and that makes the market more comfortable. we'll have to see how it goes forward. but i don't see any problems come at least this week. >> what's that fed's name, dan? do you know what i'm talking about? >> i do know who you're talking about. >> what's his name? >> bernanke. >> you, good. who was that guy last week?
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>> scott. we love scott. >> when you're put on the spot, sometimes you catch it. >> he he has two ns. >> we love scott. >> no, we don't. >> yes, we do. >> thanks so much. >> dan, thank you. fred, thank you. >> i'm still holding a grudge. any more bernakes. i'm not going to stand for it. >> he cringes every time saying it like that. we shouldn't give scott a hard time because he is not the only guy. i think it's a chicago thing. >> no, it's not. >> yes, it is. i think it's a dismissive thing. >> you will never do that again, i promise. >> we've got to go. coming up, you sit on a corporate board and you're going to want to hear our next segment. what ceos say they want from
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you. are we talking about fluffers? the inside story from yale's jeff sonnenfeld when we return. zap technology.
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we do have -- let's get that screen pop up there in front of us, it's coming slowly by surely. the dow would open up 76 points higher, nasdaq up 17 points and the s&p 500 up almost 10 points
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all as a result of this deal in cyprus, i would imagine. apple is buying slam to buy identification technology with a user is inside a building. apple's mapping software has been criticized for misguiding directions and incurrent landmarks. this apparently could help that. attention corporate boards this morning, jeff sonnenfeld knows what you need. >> good morning. how are you? >> good morning. how are you? >> you have a new paper and we also have news of this dell transaction and now we have black stone and carl icahn running around. but the big issue is what does michael dell do? he could lose his company in all of this. do you have view owes this? >> it would be a big loss for the shareholders. i like michael dell. i think very highly of him and is i'd feel bad for him to lose out. any of us who are shareholders in this company would lose
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badly. these creative geniuses make a big difference. we talk about the return of steve jobs, apple or what howard schultz could do with starbucks. absolutely, this guy has to be a part of equation if the shareholders and customers are going to come out on top. >> but if shareholders can get more from blackstone or more from carl icahn and lose michael dell if the process, maybe they don't care what happens next. >> that would be a shame. that's not for institution building. you take a look at -- sometimes we have some failures and i hate to say this in public markets, the pressing scrutiny is hard for some chief executives to reposition their firms the way we saw cesar had to do this. the short-term market
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fluctuations, they get a chance to get past speculators. this is not wild guesswork. dell has done this five, six times. nobody can be better battle tested and brilliant steve jobs only did it once. >> did michael dell make a mistake in agreeing as part of his taking private transactions to vote his shares however the other shareholders want? so that he has effectively lost his vote in all this? from a corporate governing standpoint, people thought this was a good idea initially. i'm assuming michael dell is waking up this morning and is less happy with that decision. >> i'm thinking silver lake. i can't speak for icahn. i think he's looking to make this congenial. he's worth $15 billion. he's not looking for personal enrichment. he's putting his own money into this to make this happen. so i think he's trying to make a statement that he's not out there with vanity or greedy
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play. i think he's trying to take this business to a new era. >> let's talk about your new article, what ceos really think about their board. number four surprised me. it says, constructively challenged strategy. ceos want energetic debate in the board room, but they don't like when directors take opinions outside the board room. and they also don't -- they don't like needlessly aggressive discussion in the board room. so they want to be challenged, but not really? what is that? >> well, the old, old hb -- and by the way, the hp board today, some don't realize off great team in charge there. in the old, old days of hp, they used to take their debates to a public forum was briefcases slamming on tables, folks marching out of doors, finger pointing, vilification. that's what you don't want.
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you want to have a constructive, healthy dialogue. there are a number of ceos from some large companies, media business to biotech companies. talk to us about how, in fact, they pivoted in a board room with a well informed, prepared, intelligent discussion where they realized they became the biggest an tag insist during the proposal when they heard some good ideas. this should be a partnership. many boards fail auditors. they didn't do a good job. frankly, most boards -- that's not the problem. we have some failures, i admit. most is how can you do a better job in partnership and collaboration and be a liaison to expert knowledge. >> talk about oversight. the issue of splitting the ceo and chairman roll. jp chase and jamie dimon a week
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ago. what's your opinion? do they split? >> i feel like the proverbial mosquito in a nudist colony. i know where to strike first. sir adrian cadbury wrote the commission report suggesting the separation of roles. it's a mess of a company. everybody watching this show hardly knows who owns what's left of cadbury and the breakup of kraft. and he survived on the board of ibm in its worst period without any roles. the u.s., 80% of ceos don't separate the roles. it makes in a bill gates, you know, transition to steve palmer. it makes sense. worked very well at ford. you name the worst performing companies. by the way, the barron's list of
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the world's most valuable ceos they didn't separate the roles. look at the problems in the uk where they love to advertise they haven't. did it help with bp, royal dutch shell. as you go down that list you think of the disasters. rbs, barclay's all had separation of rolls. it creates confusion in the aftermath as to who speaks for the company, how they're resolving it. and zero research that it's preventive or corresponds with shareholder wealth. >> it's a longer conversation to have. >> rex tillerson. hp. >> yep. >> it's a fantastic job. >> jeff, we got the music playing us out. we will have you back and
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continue this conversation another time. thanks. >> jeff is always colorful. when we come back, a last minute deal. in europe they are certainly bid up. the cac is up by over 1.6%. [ lorenzo ] i'm lorenzo. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at® you can pay, print and have your packages picked up for free.
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we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. still to come, last minute deal to save cyprus. plus, we will welcome harry
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wilson and ask how he would finish the conversation. stay tuned. "squawk" will be back. [ penélope ] i found the best cafe in the world. nespresso. where i never have to compromise on anything. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is only made with fresh milk. and where the staff is exceptionally friendly. ♪ nespresso. what else?
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we have a deal. "squawk" goes under the cyprus bailout tree and tells you what it means for the global market. dell's deal dilemma. three-way control of the pc maker. >> don't mess with texas. or their gold. >> i love gold. >> new legislation could have folks in the state hoarding the shiny stuff. we'll explain and get an outlook for the sector. >> week 1 of money madness is in
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the books. it's big blue versus the big jungle. we'll give you info and let you decide as the second hour of "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" on cnbc. the futures are sharply higher this morning. as as strong as they had been. dow up 64 points above fair value. s&p up 8 points. in our headlines this morning, what's been driving all of these green arrows is the european union. our michelle caruso cabrera will have more in just a moment. as andrew reported last hour, a
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dell special. the dell with negotiate will both of them. michael dell and partners are paying 13.65 a share. more in just a moment. busy woke for economic reports. none are out today. we'll get durable goods, new home sale, initial jobless claims and latest gdp revision and reports on personal income and consumer confidence. even though the markets are closed for good friday. andrew? >> cyprus khreufpbed a last minute deal to resolve the financial crisis. protecting depositors under 100,000 euros. but larger than 100,000 euros, they will suffer severe losses. let's go to michelle
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caruso-cabrera. she joins us with the latest. michelle? >> hey there, andrew. there had been reports of a tax on deposits but there is no tax on deposits in any of this deal. in short deposits, under 100,000, fully protected. uninsured, wow, they're going to get haerpled. hammered. laiki bank will be resolved. this bank is going to go away. if you have a deposit in there below 100,000, fully protected. if not, you're going to get punished above 100,000 euros. you could use 30% to 70% as they start to unwind the assets. this is the weakest bank. maroon sign, lots of lines. bank of cyprus is the other insolvent bank. that will remain standing. it will be restructured. insured are fully protected.
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uninsured are going to get a haircut. it's called a bail-in if you really want to know. but you will get stock in the bank which presumably will be worth something because it will be better capitalized. we saw bank employees take to the streets extremely angry about the restructuring. i'm going to play two sound bytes from one woman. the reason i want to do is is the first is from the early part of the interview. i think the way she talked -- i was a little bit disgusted with her. i thought she had this sense of entitlements about bailouts in europe. by the time it was finished i felt so sad for her. i want to see if you see the same emotional arc. >> what do you say to other europeans to say we bailed out so many countries. cyprus came asking for $17 billion.
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>> it's a very small amount. 17 billion euros. what is it for europe? 0.2 of the total market of the european economy. it's a very small account. they gave to spain and to other countries, to greece so many years. >> so i thought, wow, this is the point we have come to. 17 billion euros is nothing. this is how we feel. by the end of the interview this is how she sounded. >> i'm going to lose my property. >> your pension fund? >> my pension fund. my money. they are deducting them from my salary every month and i'm going to lose everything. no job, no pension, no money, nothing. nothing. nothing. >> she has two teenager children. and that emotional arc that i felt, i don't know if you felt it. i think it embodies the dilemma
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that europe faces. on the one hand, they are tired of bailouts. on the other hand, people are suffering and how do you recognize the two. >> i felt the same arc. i was listening to a couple working for the second largest bank for 20 years. they had been planning to send their two kids to school based on the very generous pensions they had been promised. but you watch this and you feel terrible for it. you can't belive that the leaders let things get to this situation. you feel certainly for people. you expect there's going to be some shared sacrifices. some will bear the brunt of it so much more than the others. >> the other dilemma, these are upper middleclass bank employees. a lot of them said i won't be able to accepted my children to
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study abroad, which is considered a rite of passage in cyprus. but you think i have seen pensioners in other parts of europe cut in half. and you want a bailout so your child can study abroad? it's a really difficult position. they have worked really hard. in their eyes they have done nothing wrong and they have that right but where does the money come from. >> right. >> we will be back throughout the day. let's talk about this breaking news o'dell this morning. we have officially a horse race for dell. michael dell made a bid for $13.65. the board, special committee putting out a statement confirming what we talked about in the last hour. there are two new proposals, one yo from blackstone, one from carl icahn. they could reasonably be expected to result in prosecutor proposals. they go on to say, and this is
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important, the special committees noted michael dell has confirmed his willingness to explore in good faith working with third parties. so the idea here is michael dell could participate in the blackstone carl icahn deal. let's explain what the two deals are. $14.25 a share in chase. if you're a shareholder you could take that money and run. or you could decide i want to participate in this transaction and benefit from the up side or potentially if there's ape down side. you could see what that would mean. how would it stay as a public stub. the transaction that carl icahn has put together is slightly different. he's offering $15 a share. but only willing to buy 58% of the company. it's unclear how much shareholders would get for each of their shares, how many they would be able to sell.
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in both transactions neither have financing committed. you never know whether a deal like this could ever get done. morgan stanley has written a highly confident letter. deutsche bank and a couple other japanese banks. it will be interesting to see if they're able to go to the same banks representing silver lake and michael dell. finance our deal as well. we'll be talking about that as well. so that's the latest on this deal. we have some deal guys. >> mostly talk cyprus bailout. harry wilson is the chairman of mava group and ceo.
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he's also a former obama task force senior member. you have done a lot of restructuring. the more i found out about cyprus the harder it is for me with a broad brush to detect others in europe. there are some countries that exist. it's treated better in a tax preferred way. it earns a return. i guess even switzerland to some extent is like that. what's the other one that's big? >> latvia. but what we think about with the issues in europe with the labor -- they need some structural reform long term. it's an entitlement state. they promised him. this is a totally different situation. this is a bunch of rich russians that went in there to try to sort of game the system.
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they found out there was a lot of investment in greek bond. so they're losing this money. why is this something that should bring down europe? >> i don't think it would be. it wasn't the russian flown that overinflated the system. it was that they invested in bad assets. >> you're greek, too. >> i am. today is greek independence day. it's a great day. >> you know a lot about this whole situation. >> spent a fair amount of time in it. the current president just came into power three or four weeks ago. there's all kinds of political turmoil. the former president benefit.
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so the size of the banking sector and the bad investments led to the short-term problem. as a broader macro issue, cyprus 0.2% it is not relevant to europe as a whole. >> and the good thing about this from a policy perspective, europeans finally did what they should have done all along. they were born by the creditors of the banks above the insurance matter. it's creating market discipline through depositors and creditors on bad parts. >> they are going to lose a lot. >> yeah. >> putin is also going to jujitsu, karate outfit, his shirt off. he said something like this is dangerous. people over the weekend likened it to saying you have a beautiful family. good people. what's he going to do? >> he could reduce gas supply. >> oh, so he can do something.
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will he? >> he has before. >> does this make it more systemic or contagious to someone else? >> there's ape context between germany and russia people were making attention to. there is a reason. >> that goes back a ways it. >> it does. there's a reason why the brunt was born by them. >> would you -- given this decision -- >> if you had more than the insured amount, do you leave it in the bank? >> that's true for any bank. >> is that true in italy? if you had money in a spanish bank right now or french bank -- >> if i didn't have any risk in my deposit, absolutely. but that's the right way to
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think about it. >> it goes back to the point joe was making earlier. you don't have this massive issue of huge accounts of foreigners, of folks in an overcapitalized banking sector. >> that's a good thing. >> i'm worried about spain, portugal, italy and just their overall problems. >> right. >> it's like a one off. >> those are different issues. cyprus does not have the sovereign debt product that everyone else has. >> what does this man to you? >> once again, europe, things looked bleak and then they launched a three-pointer right at the buzzer. but i had concerned.
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russians like chess. so what's their next move? is it going to have something to do with the gas supplies next time it gets cold? we don't know. is it in the dna of the russians to do nothing? it is uncomfortable. so i do worry about that. as a matter of policy, you're rewarding someone for putting money in their mattress and penalizing people. it's a poor choice. >> the market was up nicely on friday. it's going to be up today. are you staying here? are you buying more?
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>> it wasn't a factor last week. probably won't be this week. there are good values in the market still. >> however, the market has had a pretty spectacular move since mid-november with not much any pullback along the way. so we shouldn't be surprised if there is a pull back of percentage points in the not too distant future. this could have been the catalyst for this. >> really for this to be it, not even close to 5%. >> no. 1%. >> that's okay. we'll see. the public is still calling up and saying, gee, it seems it's gone a long way and i'm scared. >> that's exactly right. stocks are under owned.
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>> you get zero everywhere else. >> the mad dash is probably not the best timing. >> i think jewelry, harry wilson. no that's winston. i do the harry winston. it never gets old for me. i forget in two months. >> all right. these gentlemen are sticking around for the rest of the program. >> the first to protect cities and gold hoarders in the state. we'll talk about that right after this. [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market.
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could texas be ready to hoard gold? they can store with protection of the state instead of the federal government. if passed texas would be the first state to have its own fort knox. joining us now to talk more about this is senior managing director at tangent capital. what's going on here? >> it's proposed legislation. it would set up a bullion depository. it also allows for silver and platinum. >> is that because they don't
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trust the federal government? >> sure, in part. you want to give people a way to store their gold properly. this is safe storage. what's interesting about it is there are sovereign depositories like fort knox. this is the first for private gold. and the law says if the federal government pro ports to confiscate we consider that null and void. this would be a way to prevent that. so you would be relying on texas sovereignty. >> this is interesting. you hear of the germans bringing gold and not wanting to leave it in the u.s. >> hugo chavez did that a couple
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of years ago. he had armored cars going through the streets of caracas. azerbaijan, small player, but they're taking their gold. it's being debated in the netherlands. so what we are seeing is a slow motion de-money taoeuzed. fort knox and west point have our gold. the fed has everyone else's gold. >> should i be investing in gold etfs? >> sure. etf is good for short-term. on a long term, you want to hedge or insure against some cat
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traffic outcome. it was closed after sandy. >> so you think you're hedging against a disaster. >> the exchange won't be there but the gold will. >> and you need it to pay for something i guess? are we talking about a revolution, nbc apocalypse or zombie apocalypse. >> what you are doing is trying to participate in the rise and go higher. you're not going to need to use the physical gold to acquire something because nothing else is going to work. if there's no exchange, no paper is worth anything, better buy some guns too. >> well, that's a separate choice. i don't want to jump into the gun debate.
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>> you can take everybody's gold if you have guns, jim. >> he bought 100% private equity. >> he said don't buy gold. >> warren buffett can't say anything good about gold. he did the trade in a very smart way. >> he said he would rather own farms than gold. >> coming up, a company strongly.
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>> welcome back to "squawk box", everyone. in our headlines this morning, dell has two alternative takeover bids in hand. the company said the two, one from carl icahn, the other from blackstone are similar to the deal already in place. that has michael dell saying $13.65 a share.
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dollar general out reporting profit of the 97 cents a share. revenue shreupbl in line. the company seems same store sales growth 4% to 6%. apollo group 34 cents a share for its second quarter. that's well above $18. andrew. >> thanks so much. we will spend time with some of your guests. am i hearing we do have guests here. we're going to hang here. i apologize, greg. we were talking about dell just two seconds ago. you have these two offers with no financing commitment on them. they leave some of the stock in the public markets, is that a better alternative than taking
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$13.65. we have only had 45 days. >> carl icahn, only 58% of the shares. apples to oranges. >> they are. how would you decide which is the better version? >> not only is it higher it gives a chance to participate in the upside. i think it depends where the shareholders are. so the icahn deal may be better. >> i would find the icahn deal less attractive. i would look what's best for the average shareholder? looking for a highest proeused possible now. >> do you agree with at times the private equity firm that will own the company but a tiny
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left in the public markets. >> that could work. i guess i'm agnostic on that. i don't have a feeling one way or the other. >> the big turn around eludes me. what is the big growth in dell. >> we talked about stuff early this morning. >> the numbers are remarkable. their projections they thought would be 5.6 operational income. then it down to in january to 3.7. now it's khoers to $3 billion. >> it said somebody better get to work quickly. >> would you stand by those numbers? some suggest if you're in the middle of this and you want to
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participate in this other deal you don't progress out. >> i would be interesting in the deal. >> if you're looking at dell on ebitda, it's at five. even after its move from $4.19 to $4.61 is still a little bit -- i would rather own apple for the same price, come on. >> you're mike dell. he could be leaving this done. any way for him to say i'm taking my ball home? i want to put the genie pack in the bottle some somehow cancel. >> i don't think so. >> he nevered imagined this was going on tap? >> he should have known there was a risk.
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>> and he has enough money -- he has $15 million. the question is key do that with silverlake. >> prefer it to some other stock differential that allows him to do better in upside. >> monday morning trade. a flooded economic data we will be getting later this week. and checking oil praoeusdz at clearview energy. our guest host. hey, guys. even, shroets tart with you on oil. does that matter to you? i know there's an outstanding issue about russia cyprus and what was going to happen there.
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>> it will go to where it was before it hit. we're not growing command as fast her than before. they keep producing and becoming more taeurbgt at the same time. it's risk on aftermath. not part of the raging bull you have seen before. >> do we care about the weather, the snow? >> sure. it's a great trade on a snowy day in new york. you with don't see that you would have had in a couple of years. >> what do you think about some of the economic data has been almost uniformly better than expecting. >> fedex's earnings. >> i think they were blaming traffic and asia-pacific for that shortfall. i wouldn't read too much into
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that. i would be looking at the five-year low and unemployment claims we have. two weeks ago the five-year hold and the fact that the dow skwroepbls then it moves five. and housing is very strong. and the banking system has healed measurably. there are a lot of this beginnings driving upk5rd 150eud revision in gdp. >> just put it to work or wait for something to happen here? >> look, you can always find stocks that haven't done anything for the last 12 months. nike had done nothing until friday when it was up 11%.
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tiffany had done nothing for 12 months until they reported earnings last week and got it higher. ralph lauren would be another one in that category which would do well. starbucks is up 60%. what will do very little. the s&p gets eight or nine percent above it's 2 hyundai. it tends to converge. for whatever reason that we don't about now. so i would not get tee tuesday affect. we're going to earning 1650 on the s&p. i think that's still a pretty good target for year end. maybe conservative. >> if you were literally to bet on short term.
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>> it is spring. drives picks up. upside gently coming as part of the seasonal trade. up next the season for housing. we'll get an end to the sector. and two housing arrives next. (announcer) scottrade knows our clients trade
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here's my take. profits are the mother's milk of stocks. grow the pie larger for everybody. too big to fail. broadway. i can see it now. the weather not with standing. we are entering the super bowl
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season for the housing industry. joining us is ceo and chief market strategist and vice president at wl ross and company. good morning to you both. just quickly, things are a lot better. we see that if we were down here at the low we've come back here which feels great. but we're a long way from here which was not really anyway, right, on husbanding? >> perfectly way to describe it. >> what about the banks, though? is it still impossible for them to -- are they still really cheap and looking at -- >> no. people say that all the time. you can get loans. it was saofr to the extreme of being busy. 580 credit scores getting loans. which is really not appropriate. nothing down. today you need some down
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payment, job, reasonably good credit. >> you need an address. >> it's like it was 10, 15 years old. it's really not harder than that. don't you hear morery stories. >> no. the credit score that is like a minimum credit score, 640 you can get a low. you need your down payment, jobs. you have to qualify these days at the. you can get a mortgage with 3.5% mortgage 10 years from now. so there's grit somebody out there. >> of course of them. most being sold. >> it's up to congress but should be fixed. still over 85% of the loans in this country are going to the
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government, which is much too high. >> does it really feel high that government is backing this? >> part of it is qe3. and franky, freddie, and making loans. the loans are a much higher quality in those days. >> congress is streaming already thief tphoft done enough. and forgive. >> fha is making loans at 3 pfrs and a lot of them going belly out. they are the only unwithes with them. >> >> 3%. >> 3.50%? >> 3.25 pes. >> 15, 30. but is it really smart -- is this 3.5% going to be the
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prevailing interest rates 15 years from now? aren't the investments going to be pretty poor? >> it is all of us here. it's things like that. especially nobody holds -- >> one again somebody is going to be this thing with when the fed pulls back from the market. we're going to go another big round of losses. >> sounds true for treasury. >> i agree. absolutely. >> investing the stock market, put aside a person portion for treasuries of the bond market. >> it means they will have a difficult time unwinding this. it is going to be difficult to unwind. 85 billion, 40 of which in
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mortgages. they're allowed to take the money of prepayments and invest that. $75 billion a month. not the 40 they advertised. >> just real quickly to you both. how much improvement is due to the fed and how much of it would have been done yesterday. >> a lot due to the fed. interestingly enough you feel better when your equities perform better. >> i wouldn't been here right now. >> it's taken a long time. but it finally reamed to be working. there's pinned up demand. >> zerpa is con fist tore to them. >> it is. it really punishes savers. in very tors has property 19%.
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three or four years you will have more inventory. amount of folks won't sell. when their homes are a higher value, they would be able to sale. >> all right. how much are you worth now? how long were you with bill burr? >> three and a half years. before that i was a government phi. he's been very active in financial sources not only here in the i say -- uk and ire land. >> thank you. i appreciate it. when we come back, old school meets new school. a battle or tech supremacy. ibm versus we'll lay it out and you decide
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which companies to be in your portfolio. jim o'neill will tack to us about cyprus and the global economy. [ penélope ] i found the best cafe in the world. nespresso. where i never have to compromise on anything. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is only made with fresh milk. and where the staff is exceptionally friendly. ♪ nespresso. what else? [ laughter ]
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welcome back, everybody. we are halfway through. winner friday was g.e. with 61% of the vote on facebook page. and today's contest features ibm
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versus amazon. so this is old tech versus new tech. here to help you make your decision on which stocks should advise. for amazon, r.j. from the global director of research. which stock, why do you think your stock is the best for people to pick. you think ibm is a buy. way? >> it should be a core technology holding. the past five years the company has delivered about 16% eps growth a year. it's a dedefensive play. 60% of profits are from software and service the. even in the eight down 08-09
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they were able to grow. they are a major innovator. watson is playing into cognitive computing. won jeopardy a couple years ago. they're already applying at different health care providers. you will hear more long term. >> for the oefptd year ar. >> owners 4% over that time frame. evil. >> you didn't notice that how sieve he was to hal? you don't have any problem with that, a computer this smart? you don't have a job purchase.
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>> i think it will aid doctors, order orders. >> how about the criminal part. we have seen terminator. >> you come and enable this to happen. hunter kerls. >> searching out the few human remaining 5r7b. >> i will tell you ibm recently -- >> the kind of guy in the movies enabled all this to happen. >> watson mad a dish with a lunch. 1,000 different chemical formulas. >> made out of humans. >> stop. >> i own im pibm. >> a 1% to 3% top line grower.
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they have divested 15 billion in revenue the last week aid. they're trying to turn it in and over commodity. r.j., make your case. this is a tough act to follow. this is one of the tougher. >> i think really what i'm looking for here is that this company laid probably. it will probably do pause we see -- another a 4% last year. you'll add manager eupbl to that the next couple of years really in a number of key webs. amazon prime. description. base services. third-party sales, digital
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conte content. we're going to go from 1, 2% to 6 or 67 average specials. >> do you own amazon? >> a little bit. >> with well, that's a tough question. given its valuation is a longer duration type of asset. if you had a five-year tease raise, that more appealing. 9 out 10, i would go with amazon. >> do you believe this, jeff, what howard said about ibm? i mean, ibm is better than amazon. >> that's ridiculous. >> i know. >> he said five years he would take amazon. >> do you buy that, jeff? i don't know. i'm with him.
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coming up -- >> that's it. >> if you add a lower to h-a-l, do you know what comes in? >> hal is ibm. >> are you all human? >> i can't say. >> you may be a machine covered with skin. >> jim o'neill on cyprus and the global economy. we'll talk to him about all that after the break. eak. it's a phoenix with 4 wheels. it's a hawk with night vision goggles. it's marching to the beat of a different drum. and where beauty meets brains. it's big ideas
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♪ when emerson takes up the challenge, "it's never been done before" simply becomes consider it solved. emerson. ♪ >> eu's plan to bail out cyprus. >> an intense weekend for the cypriots. if you are an investor you are on notice. mark grant of southwest securities. and squawk market master jim o'neill of goldman sachs asset management. college basketball has 16 teams remaining. >> and spring real estate is heating up.
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>> milk was a bad choice. >> how to add value to your home. >> is it pretty? >> yes. you have to push me, though. >> i will put you in the back of the car. >> host of diy yard crashers is here with projects that will give you the most bang for your buck. the third hour of "squawk box" starts right now. welcome back to "squawk box" on cnbc. our guest host howard ward, chief investment officer of and harry wilson, claire man and ceo of may va group. first, though, we have some morning headlines for you. you've got to do cyprus.
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and then dell. >> cyprus first and then dell. international lenders reached a last minute rescue deal to resolve the financial crisis. it will shut down the second largest bank and inflicting heavy loss on uninsured departmentors. no across the board tax will be imposed on deposits in banks in cyprus. michelle caruso-cabrera will join us. the company is saying michael dell says that he will explore these offers and potentially participate in good faith. we'll see what all that means in just a minute. as we first reported this morning, icahn offered 58.1% of dell. blackstone proposed $14.25 a share. they're not buying the entire company. they're considering them
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leveraged recap. enrollment dropped for the fourth quarter. apollo is saying business is pwhaoeg helped by increase in workers who feel the need to acquire new skills. because of the deal in cyprus, you see strong green arrows this morning. dow up 65 points above fair value. s&p up 8.5. off the strongest left ofls morning but still significant gains. in asia, big gains in japan. nikkei 1.7%. in europe we have listened to see strong numbers there as well. kabg is up 1.4%. back to cyprus which is the reason for all the the arrows. michelle? >> reporter: hey there, becky. if you're just tuning in this morning, the worst situation possible. the worth financial collapse has been avoided.
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however, the solution is still going to be painful. it does not include what had been the most controversial assets. they are not going to impose a broad tax in this country. bank structuring solution. albeit one of the most brutal we have seen in modern economic times. depositors will get hammered. most of the senior bondholders are going to zero as well. and the uninsured depositors could face losses between 30 and 70% when it's all worked out. some will get debt in a new bank. others will not. we have not seen this in modern times. a ton of money held by russians. we got the first commentary. the stealing of what has already been stolen continues.
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that's according to prime minister medvedev. and putin said he's willing to structure a loan for cyprus they gave for 2.5 billion euros. apparently he supports the deal that's happened here. somebody who does not support what has happened is a cypriot. he is up able with the way this deal went down. take a listen. >> i don't like it because the first time in the euro depositors are ask to bail out ailing banks. >> what do you say to those who say this is how it should be. if you are a very large depositor, very large corporation it is up to you to know the quality of your bank and that if there's suddenly europe starts to distinguish between good banks, bad banks
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the same way they started to accept sovereign risk differently then they used to, some people argue that's a good thing. >> first of all, this is not the time to start because they already had four countries in trouble. it is not going to be part of the banking union. if it srp, we would know the rules of the game and split them up. >> another big criticism he had, which is maybe consensus, the way they flip-flopped. guy, still waiting to see whether or not they have the mechanics to reopen most of the banks tomorrow. thank you. >> thank you very much. >> general electric. sometimes we would mention things about g.e. you never know whether to mention it or not. comcast.
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would you mention if both had comments about a company. >> yes i would. >> jpmorgan adding it to its focus list. goldman sachs, according to one of the greatest journalists on the planet, carl can't nia is tweeting, they rein stated in a pie 14% upside target to 47 for comcast. >> they like it now? it's good to see people jumping in now. >> becky, this is consistent. this is what wall street does every day. superior fundamental business. >> the moment up -- >> wait. >> this market drives me crazy. >> investing can be -- they can
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make it right. >> stocks that hit lows hit new lows. >> until they don't. >> we were overweight apple. went to underweight apple in the high 600s. >> you didn't go back to a bottom? >> we went back to an overweight apple in the 400s. >> 490s? >> no. probably 450, 440, 430, 420. >> you're still comcast. >> we love comcast. we love cable. there's nothing knew today than you didn't know a lot more. >> the voice is coming back with usher.
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number two, revolution is coming back. >> and what about squawk? >> and sidewalk box never lost. >> it's fundamentally an an attractive spot from a valuation perspective. >> that's a valid point. >> i just don't like the heavy influence of momentum in the stock market and analyst ratings because i see it every day. >> because you look at things from the ground up. you decide based on the fundamentals of the company. >> we're old school. a lot of times stocks -- >> but he's not making an apart. >> i don't. >> you're not arguing that you should eup vest. >> it's hard to in vex in
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stocks. >> there last summer you could guy google for 557. >> think about apple. >> they bought motor owe on la. >> think about it at 200. >> how many new highs from 200 up? a lot of people said it was anew high. >> that was a mistake and it was not from me. >> every one was a new high from 90 -- >> yeah, absolutely. >> but his point is there's nothing new in the business. usher is new. >> we have other news in this morning on tpaes book. the sec has approved the nasdaq, facebook ipo.
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that plan offers $62 million in investors in the ipo. it's unclear whether they will assess a $5 million fine from nasdaq. >> joining us now is mark grant at southwest securities. mark, we have been watching you in europe and in cyprus. what's your take? >> becky, it's a relief rally. i'm not surprised we're having one. the european union seized bank deposits, private property. and i think that's causing a huge ripple certainly in the institutions. two, the way this was all handled was very problematic for people in terms of the implications of what the eu might do.
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>> mark, i was more concerned last week when you started talking about the seizure of deposits. it was for people less than 100,000 in the banks. but harry, who is here with us today as played out this is the way things are supposed to happen. if you have uninsured banks in a bank that's a bad bank you should look. >> hrt me look at that another way. if you have a bankruptcy in the united states or britain, there's due process of law. you go to the bankruptcy court. the bankruptcy court decides who gets what assets. here we have the government in berlin and brussels mandating that another country that bank tkbgts these. this is very first from a normal when you see how much money is
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in bank and make your own decisions. >> it's not going to be 5.8. it will be a normalization of laiki bank and the bank of cyprus. if you have watched the press conference at 2:00 in the morning, whenever it was in cypress they are not going to seize the assets. >> you will get shares of the new company. >> there was at of push back from the corn banks. i know swerer land and other countries have a huge cry. but there there's no due process that take place. it is pwhapb dated by the government. you have some money. they're going to take it.
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>> mark, are we going to see a flight from other banks in other countries? we talked about this a little earlier? are people going to say every deposit i have that's over that insured mark i have to get it out of the bank immediately? >> i think there's certainly -- from the public they're going to look at it. i can tell you for sure in talking with a number of institutions over the weekend and during this cyprus problem that the institutions are looking very hard at what they're going to do a shift out of europe and wider sprae er sp >> >> who is the winner? >> who is the winner? >> are they going to the american or british banks? >> american or british because of the laws or structures about
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due process. >> mark, thank you. great talking to you. >> you too, becky. >> the unfinished business of cyprus. three possible ripple effects. >> check out the skwaud pox" market indicator this morning. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner,
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a dollar general earned -- earned a dollar. i would have done something. >> cheated? >> no. managed something, moved it from somewhere. >> cheated. >> you don't -- manage the business. 97 cents a share.
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benefited from increase said food sales. >> we've been talking all morning about cyprus. steve liesman joins us with a few different aspects. >> we've been trying to get to what happened last week with the imf. there's been in accountability when it ultimately signed on to a deal. what they did is take a small situation and find a way to turn it into the only way it could become systemic risk. in fact, that continues. we called to ask would you tell us what you were thinking. >> probably said something nastier. >> there wasn't much explained there. holding the imf accountable if
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they ever answer questions about what you were thinking. unsecured creditors, secured creditors, depositors or not. systemic risk. when you think about where we have been the last five years, eyes land. ireland. places where you allow the money to come in. that's part of the global capitalist movement. but what happens on the back end? is europe moving fast enough towards a unified banking regulatory regime so this can can't happen again. >> here in the u.s., they were trying to figure out who to save. where do you step in, where do you not? have you had time to game this
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out and think it through? >> great question. nine months ago cyprus asked for a bailout. obviously what happened the losses when they first asked at one level. they end up being two, three, four, five x. what happened in that nine months? there is an article in the ft today that the eu, icb, there's bad blood after this last deal. what hand is the global bailout in right now? and what happened next time? >> i see the info we know about russians. it made it totally different. the poor lady that lost her pension. >> maybe the i mf isn't think of it that way.
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>> i thought this came out of -- this original idea was from a local idea. >> sure. and they wanted something. >> but to say go ahead. who had the authority to do something like that. >> hold on. if the local officials are saying we can get it past. >> to think about things like global systemic risk. if they are not thinking about it, we have this broad global view. if you guys do this this will
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create systemic risk. you know what, it's not even done yet. >> you don't think we would be having this fight if they went after the deposits over 100,000 euros. >> over 2 billion euros. that's the whole crux of this problem. crazy they didn't identify it as an issue. >> the ft story said they would have had a different tact on this approximate. >> she had originally called for a deal. the question is how they got away from it and why she let it happen. there is one potential upside. there is a massive lesson sent to those who put their money in
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these tax havens. people who decide to go to these places say i have to do more investigation but the health of the bank where i'm putting my flighted a skopbded money. >> when we come back, good news for american consumers. and goldman's jim o'neill on the line. and the global market rally today, whether he buys in or not. u.s. equity futures are up. but they've been losing some of the gains. dow futures up 57 above fair value. ♪ you know my heart burns for you... ♪
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welcome back to "squawk box", everyone. gasoline prices slipping 3 cents the last two weeks. the average price for a gallon at $3.70 a gallon. when we come back, goldman's jim o'neill. his latest bailout and life beyond cyprus. ♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before" simply becomes consider it solved.
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welcome back, everybody. u.s. equities futures have been higher because of this deal in cyprus. although you can't say at this point we have reraised some of the bigger gains with with we were up 80 points above fair value. now up 54 points above fair value. the all time closing high of 15.65 of course the all time day high 15.76. s&p futures have been indicated sharply higher as well.
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>> whoa! >> scary. >> more serious than it was before. cyprus clinched a last minute bailout deal. is this solution just a short-term fix to a much bigger problem. jim o'neill. i hope you can hear that. goldman sachs asseting management. hey, jim. what concerned you last time, rightly so, you were scratching your head how they came one this. if we protect everyone under 100 that has the insurance, why can't they hit them trying to -- what's wrong with the deal? sounds like a pretty good deal. >> what's emerged is a side better than we were talking about a week ago.
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the fact that we're going to whack people whatever income level is what was inappropriate about that. and raised huge question marks about these ambitious goals of a banking union. so what we have ended up after a smoke-filled night in some room is a little bit better. actually, they have been bothering a lot of money too. clearly it's better than it was a week ago. >> if you invest in an insolvent bank, the bank goes under and you lose your deposit. a skoer world where there's risk. these are big boys, aren't they, jim? >> no.
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the thing that maybe there's some good from it. each day the markets seem quite calm about it all. it reensures or suggests all over the world for a higher return there's obviously some risk. and i think part of the dilemmas of the much of the past, well, i don't know, 20 years at least, if not longer, we see for forget that occasionally. >> so two years from now there are more eu members or less eu members? >> eu or euro? >> let's go euro members. >> i think oddly there might be a couple more. some of the more hard car or
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still keen to get into some club. but without any huge confidence i would harbor guess a couple of these guys might. if not they will be very close. >> so no one is going to leave. >> i want to go back to all the money that should be rushing out of the banks. >> you mean in cyprus? >> no. if you're corporate, money in french bank, italian bank, a bank in portugal. do you say, okay, let's rethink what we're doing here? >> you're going to have to. as it happens i personally have a small investment just a year ago in a greek-based online insurance company business. and they have luckily only a sphal part of cash. so they're getting whacked on
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it. having listened to these guys when i saw them last week they're certainly going to be thinking about these kind of issues. and any corporate with business exposure all around europe is going to be having -- your audit committee would have to be presiding over such discussions. if not it would be -- >> what do you think the next chapter in the crisis goes? >> can i throw in something that dawned on me a week ago. let's get it in perspective. by the time the banks reopen, assuming it's not too far, they will credit another one. this is $22 billion economy. my big thing is trying to create cyprus every week. so let's keep it in perspective. >> where do things go?
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the big issue, interesting fun and games is mr. grillo. that got so many dimensions to itself. basically a political system currently frozen because of this huge populist movement and importantly reflecting younger people that don't have the same constitutional memory and history of why the whole thing existed in the first place. they seem to be saying we have had enough. that is not an easy thing to solve at all. >> that's more fun. i think there is an element of fun about it. the music, food, leaders,
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everything. the island. right? >> they have a lot of good things. even by their standards of many odd moments of political coordination and or lack of it, they have some real thinking on the scene here. i don't think the system seems to be how to deal with that. something that gross more and more in my mind. partly why i asked about the eu. with eu it came into existence of the polos of world war ii. the younger generation, it is now 65 years ago, my generation vaguely remembers our parents going on about it. my kids and people coming into the working population they're like what is this thing as to why we have this system?
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and to have everything done because of the past is not enough. they have to start looking more outward and forward and creating hope and opportunity for young people. >> thanks. appreciate it. talk to you soon. >> all right. let's continue on cypress and the market impact. rick, we've been watching futures. they started out very strong. sharply higher. but not as strong as we had seen earlier. >> they give a clue as to the ultimate impact on what happened in equity markets. currencies against the green back, peso, canadian dollar. the currencisis all down are all in europe. with the euros specifically lower it's going to be hard to look at this big upside for the
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market. does it make you feel better? the fact of how all of this let anybody know first of all, you need to do your research. a lot of accounts didn't move because they couldn't move. if you're in countries where you don't want your deposit. how much money can you take out? if you ask the bank president what the rules are, he's going to tell you he can't tell you the rules. a lot of issues for a lot of countries here. i don't think america is anything what's like what's going on in cyprus. but it's a better deal than confiscating insured money. it is a fastering issue that
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isn't going to go away. >> rick, plenty of people have been saying this is no different than the fed's zero interest rate policy. >> the first day it happened i came on the air and read a bunch of e-mails why is this any different than g.m.? you go in and pick which pecking order. >> thanks, harry. >> or there's been so many stories about savings and being penalized. i understand that. in the end it's all about degrees. definitely a lot more degrees of separation between a person and their financial wherewithal than there was 10 years ago. >> spring landscaping season is approaching. which backyard project is going to give you the most bang for your buck. the star of the hit show "yard
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and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ welcome back, everybody. despite all the cold weather we have seen across the country today, it is spring time. if you are looking at your yard with a case of the blahs, our
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next guest will have a few ideas for you. matt, i am so scared about all the projects that you take on, all the things that you do. but it's so amazing to watch these things. how do people dig in and say, okay, this is a massive overhaul. >> it's huge. amount of people don't take advantage of the living area. you have almost as much square footage if not more. that's why i say make it a living space. clearly define your areas. i like to hard scape. hard scape. pavers, concrete. a contractor to do and what you can do yourself. >> big ditches. >> exactly it gets heavy. you said it's daunting.
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>> there are things we want to do. and we don't have a clear enough idea what we're going after. >> first thing, for a hard scape, contractor. they can do a stamped concrete, make it look like stone. an acid wash. we have done ones where we have imprinted leaves and gave it a green acid wash. that's a custom look. or throw down sand, nice flagstone. even get crushed rock. you can do this yourself. you'll get nice color. clearly define that area. examine put a perg la over it. >> some are $20,000. >> you can start at 10 grand and go to a million dollar. >> a million dollar? >> especially out in california. you should see the things people
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do. it depends how custom you get and how heavy the job is, the concrete you use. a kitchen is another thing people want. >> kitchens and bathrooms are what they say to re-do. do you get it back? >> i do. in a kitchen. the number one thing people want is a place to cook and entertain. so there are two different ways to do that. you can have a built in custom barbecue. we have done one witness stand stone edge tops. plaster to get a reality built-in look. or if you have a stand-alone barbecue, built a nice table, bar, make it look built in. define that area. give yourself a seating area. >> with housing prices down and sliding drastically, what happened with some of these backyard makeovers? were people willing to spend more because they knew they were staying? >> i think it's the last thing
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people do is the backyard. they call it the back for a reason. it's the last thing people do. when they put the value in, they do bedrooms, kitchens. so now i think the market is coming back up, hopefully people are getting some equity. they're going to be able to spend it. it's a missed opportunity. >> i have a question about these shows. you do these things in two days. >> yes. >> when it's over -- it looks great on tv. is there really a third day after that where you have to fix stuff underneath? >> you've dealt with some shady contractors. >> i have eyewitness accounts. i do it in two days. >> is it no sleep something is everybody working 24/7. >> look at my eyes. i'm tired. what i love, though, and i do it right the first time. and i love to build. that's my passion. >> what would you tell someone
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that has three dogs? two of them large. >> who are you talking about? >> me. my backyard is -- >> a mine field. >> yeah. and we have a guy come twice a week. i'm not even talking about the gross stuff. i throw a ball with my german shepherd. it's impossible to keep grass. >> get a hardy grass like st. augustine. >> or maybe a dog track. i don't know what to do. >> well, grass is going to be tough. there's no grass -- >> i have a golden too. golden female. yellow spots. >> have you looked into synthetic turf? it's not the days of -- remember the old miniature golfing no. it actually looks like turf. it's huge in las vegas. it's coming out to california. especially in a place with a lot
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of water restrictions. >> how did you get this job? did they cast for this? did they say out of work soap opera stars? i can't imagine a lot of husbands want you in the backyard for two days. what did you do? were ow a soap opera? do you want to be on one? >> funny enough i was on a soap opera. i built homes since i was a kid. >> you walked in and they hired you. and you're good on camera. >> thank you very much. i think i love that i do. i love to empower people. diy, people can watch us, get inspired. oh, maybe i can do that. i want to make it manageable for you guys. hopefully for me i'm doing my job. i love what i do. hopefully it translates. it doesn't seem like work. >> matt, thank you very much. >> my pleasure. any time.
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>> stay away from my backyard. glad i have those three dogs. one is a german shepherd. coming up, jim cramer sounds off on the morning's top stories. and we'll slip in a little march madness with the mad money host who called lasalle. stay tuned. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]'ll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ nespresso. where i never have to compromise on anything. ♪ where just one touch creates the perfect coffee.
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where every cappuccino and latte is only made with fresh milk. and where the staff is exceptionally friendly. ♪ nespresso. what else? ♪ but that doesn't mean i don't want to make money.stor. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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let's head down to the new york stock exchange. i asked for extra time, cramer. the election, right before you go out on a limb and you're exactly right. can you be exactly right. you're right about that. lasalle? that was because of philly. >> totally. >> but you made a point of saying, lasalle, and they knocked off kansas state and if mississippi can beat wisconsin, did you not think that would be a problem? i have to tell you, i think wichita state better watch out. the offense is real. my mom lived around the block from lasalle so it was a total phone call and it's been years. now you're arguing with my daughter who for some reason is a huge shocker fan. i love the shocker game and you
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know what? the temple game was fantastic. i said, god, that was a great game and i realized, i liked that a lot more after it was done and i had my head in my hands. and did you watch him make the free throws? >> no. you had a run of ten points at the end and i felt so bad because fran dunphy is 3 and 14 in the nca and boy, these games are everything, joe. did you see what's his name on ohio state? did you see that? >> i'll take that. i need that because ohio state i have going against miami. i've been watching him the whole time. aar aaron craft is -- three seconds. how about dell? what should we do. that's why i saved extra time. i know before david faber left we felt it was almost
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inconceivable that these bids would come up and i'm starting to think, what am i missing? there really is in the end a pc company with some acquisitions that made it so it's little more nonpc, maybe server oriented, but government contracts galore, lots of them are not doing so well and it's almost like they're forcing michael dell's plan to wreck his company and the company will not be able to make it under these circumstances. >> would you like to be a public shareholder in a company used by blackstone. the only public stub where we had the transaction was clear channel and that was quite a miserable experience for most people. >> i also don't like the stub deals because you load them up with debt even though debt is really cheap, you have a company that was not doing well. this is not like a company that was coming in with a full head of steam and was undervalued.
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so i don't know where these people think that the cash flow will come from given the fact that this end of the tack is just the worst end of tech to be in. i don't know what to do now. david was saying it was a very good, special committee and i take the money and run. i just think this is a 16 seed trying to get into the elite eight. you want to get into it before it happens. >> 15 might do it, right? faber is back today,isn't he? >> no, i don't think so. i think he's in the florida gulf coast. >> oh. he's out for more than a week. it was a destination, now it's a school. i love it. >> isn't it classic? >>. >> we'll get the last word on what is most likely to drive trading right after this.
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Squawk Box
CNBC March 25, 2013 6:00am-9:00am EDT

News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin. Business news and talk as the trading day unfolds on Wall Street. New. (CC)

TOPIC FREQUENCY Cyprus 47, Dell 37, Us 24, Europe 18, Blackstone 12, Nespresso 12, Carl Icahn 10, Euros 9, Eu 9, S&p 8, U.s. 7, Becky 6, Ibm 6, Jim O'neill 6, Hertz 6, Italy 6, Harry Wilson 4, Emerson 4, Joe 4, Icahn 4
Network CNBC
Duration 03:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 528
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color

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on 3/25/2013